[Explainer] What does it mean to be a mature company?

Here are 3 quick key figures from SPI Benchmark to trigger your interest:

• + 23% billable utilisation
• + 14% project profitability
• + 152% bottom line (EBITDA)

These are just three of the most eye-catching differences between companies on levels 1 and 2 on SPI Research’s maturity scale.

The scale goes all the way up to level 5.

This is included in SPI Research’s benchmark for the consultancy industry.

In the benchmark, more than 500 companies are measured against more than 100 key figures.

The conclusion is that your KPIs look better when the maturity level of your company is higher.

56% of all companies are still at level 1 or 2, and the likelihood that your company is at the same level is high.

Naturally, we need to get you up to level 5, and the article here offers inspiration and help.

But first: What makes up a mature company?

In short - what is maturity?

Maturity doesn’t sound sexy.

It sounds like a bowl of ageing companies with a dust of dried-up innovation ability.

But the association is deceiving.

In reality, maturity should take your thoughts to words like professionalism, excellence and competitiveness.

Maturity is the ability to:

• Develop and fine-tune the workflows in your company
• Incorporate learning and new knowledge into your work procedures
• Make sure leadership runs through the organisation and gathers the employees towards your common target
• Exploit technology to create a solid business and better work procedures

The SPI benchmark shows that maturity has nothing to do with age. You can run an infant company that is relatively mature at the same time.

It all comes down to your organisational professionalism.

What does maturity look like? - SPI Research’s maturity model

To grow your maturity, you need to do it on an operational level. You need to be able to see when you are mature and when you’re not if you need to develop your company.

And this is where SPI Research’s maturity model can help you.

The model splits up maturity into 5 performance pillars. And you can be more or less mature in the different pillars. The pillars are:

• Leadership (CEO)
• Client relations (Marketing and sales)
• Talent and Human capital (HR)
• Service execution (Project managers)
• Finance and operations (CFO)

Each pillar has its characteristics that reveal the different maturity levels.

You can use the maturity model to test how mature/professional your company is within the five pillars.

If you would like to see what characterises the 5 levels, keep reading as we examine each one in more detail. 

[How-to-use] Test your company - the 5 maturity levels

In this section, you can see the average KPIs and typical characteristics for each maturity level.

This gives you a sense of your maturity level and shows you which areas you can improve.

We'll start with level 1 since we find most companies at this level.

Level 1 – Initiated (30% of all companies)

If your company is at level 1 on SPI Research’s maturity scale, it is characterised by ad hoc workflows.

SPI Research calls this level the heroic level because success is often driven by a few individuals delivering extraordinary performances—not a well-oiled organisation.

The work environment is chaotic and opportunistic. It requires employees to take on numerous roles, and specialists have difficulty exploiting their core competencies.

You have different perceptions of best practices and quality across the company, which makes it challenging to provide a quote and deliver quality on time.

The IT landscape is fundamental, based on Excel sheets, and your systems are not integrated at this level. Leaders, project managers, and financial controllers do not have insights into the company's key figures, and they regularly make decisions based on old data or gut feelings.

Level 2 – Piloted (25% of all companies)

At level 2, you start to incorporate work procedures for different functions across the company. In single areas, you have established best practice standards.

However, neither processes nor best practices are documented and made available to the rest of the organisation.

Operational excellence can exist within single departments or specialist teams, but not across functions or the organisation.

More functions are digitalised but not integrated, making it difficult to get an overview of key figures.

Level 3 – Deployed (25% of all companies)

This is the level most companies should strive for.

At level 3, standard processes and management principles are broadly anchored across your organisation.

At the leadership level, you have established targets and management mechanisms for finance and project delivery. You deliver projects efficiently and focus on aligning processes within and across organisational functions.

You now use standard methods and quality measurements in project execution, which opens the options for creativity and overperformance. In the fight for the best employees, you become attractive to ambitious talents.

Digitalisation and automation of project and resource management through a PSA system is in place, and you have deep insights into project execution and finances.

Level 4 – Institutionalised (15% of all companies)

At level 4, your company is an acute management, measurement and execution machine. 

You have a Business Intelligence setup that allows you to measure critical vital figures, and Sales has a good CRM tool to forecast the future.

Within each performance pillar, you have worked out detailed operational principles for execution, tools and measurements. These principles let you manage finances and quality stringently and with excellent transparency.

As an organisation, you have established quantitative and qualitative measurements for sales, customer retention and market penetration.

At level 4, you start to select your customers and projects because you do not waste time on unprofitable businesses.

Level 5 – Optimised (5% of all companies)

If your company has reached level 5, you have fought for it.

I want to congratulate you. The path to level 5 is hard, but the reward is matched, and in most metrics, there are higher profits when you go from level 4 to 5 than when you go from level 3 to 4.

This means that you have basic frameworks in place for management, measurement, and execution. Now, you have established targets for data collection and learning from everything you do. Based on your data, you require constant revision, optimization, and innovation of your processes, which makes you highly competitive.

At level 5, firefighting is history because your organisation has become highly sensitive across teams to the need to put out potential fires before they start.

Finally, your digital landscape is fully integrated and standalone systems do not exist. Your PSA solution is completely integrated with your CRM and BI tools, and you have practically eliminated data gaps in your reporting.

Five tips to grow your maturity

If you want to develop your company’s maturity level, it can be challenging to get started.

And five tips will not get you halfway or make you succeed. But they are pulled out of our internal work in TimeLog with optimising and making our organisation more mature.

I can tell you that we are in a good process, and I hope you can find inspiration in our experiences.

• 1) Get the leadership team aboard
  Your entire leadership team must support the idea. If half the team sit on the fence, it will be difficult for you to develop the teams across the organisation.
  
  
• 2) Make a decision and see it as a serious investment
  It is a time-demanding investment, and you must prioritise it over other tasks. You can’t expect to mature by running a business as usual and then develop when there is time for it. Cause there never is - right?
  
  
• 3) Get started fast
  There is no one right place in the company to start. Many companies develop in totally different ways. In young companies, the focus is often primarily on developing customer relations, while more established companies have the energy to look more into fundamental processes. Go for the low-hanging fruits as much as you can.
  
• 4) Don’t give up – adversity is normal
  Skeletons are expected to come out of the cupboard once you take a critical look at your work processes. It is important not to close the cupboard again to prevent them from coming out. Otherwise, you will be knocked over. Address what comes out and fix it, even if there is more than expected.
  
  
• 5) Pay attention to your success
  As you get a grip on more and more processes, you must notice where you improve. The employees must see success. Organisational development is challenging for them, too. Find examples where you do a better job than before, and make sure to give words to them together.

We can support you in the digital part of your maturity journey

You may find it weird to read this article about maturity coming from a software company.

And maybe it is.

However, through implementing TimeLog for our customers, we have repeatedly seen how our customers move up on the maturity scale.

No IT system can improve an organisation’s work procedures alone. That is also true for TimeLog. However, our PSA solution encourages a more well-considered approach to work processes supported by the system.

At the same time, the PSA solution provides your company with an architecture to link the work processes and enables you to optimise the entire organisation.

Especially if you run a consultancy business.

If you would like to know more, you are welcome to book a free 20-minute investigative conversation with one of our skilled consultants. We might be able to help you raise your company's maturity level.

TimeLog and SPI Research’s Maturity Benchmark

Since 2017, TimeLog has cooperated with SPI Research to publish the early Professional Services Maturity Benchmark for the consultancy industry.

To our customers, TimeLog is often instrumental in a transformation towards higher maturity, and we, again and again, see how our customers develop – not only in size and revenue – but also in professionalism and maturity.

TimeLog releases the SPI benchmark and an Executive Summary with the benchmark's most important key figures and takeaways.